{"id":2044,"date":"2017-10-31T09:30:23","date_gmt":"2017-10-31T09:30:23","guid":{"rendered":"https:\/\/swaritadvisors.com\/?p=2044"},"modified":"2023-03-17T18:36:01","modified_gmt":"2023-03-17T13:06:01","slug":"checklists-for-nbfc-license","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/checklists-for-nbfc-license\/","title":{"rendered":"Important Checklists for NBFC License in India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Non-Banking Financial Companies (NBFCs) are Companies who act alike Banks. NBFC License is a Company duly registered under Act whose principal business is to conduct the financial activity. In India, the number of NBFCs is significantly growing and plays a vital role in the financial sector. In this blog, we will brief about the complete Checklists for NBFC License registration in India.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a4a93a882a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a4a93a882a\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/checklists-for-nbfc-license\/#What_is_a_Non-Banking_Financial_Company_NBFC\" title=\"What is a Non-Banking Financial Company (NBFC)?\">What is a Non-Banking Financial Company (NBFC)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/checklists-for-nbfc-license\/#Registration_of_a_Non-Banking_Financial_Company\" title=\"Registration of a Non-Banking Financial Company:\">Registration of a Non-Banking Financial Company:<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/checklists-for-nbfc-license\/#Conditions_for_Registration\" title=\"Conditions for Registration:\">Conditions for Registration:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/checklists-for-nbfc-license\/#The_process_of_Registration\" title=\"The process of Registration:\">The process of Registration:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/checklists-for-nbfc-license\/#Documents_Required_along_with_Application\" title=\"Documents Required along with Application:\">Documents Required along with Application:<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/checklists-for-nbfc-license\/#Exempted_Companies_from_registration\" title=\"Exempted Companies from registration:\">Exempted Companies from registration:<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_Non-Banking_Financial_Company_NBFC\"><\/span><strong>What is a Non-Banking Financial Company (NBFC)?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Non-Banking Financial Companies is Company registered under <strong>Companies Act<sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Companies_Act_2013\" class=\"text-primary\"><strong><em>[1]<\/em><\/strong><\/a><\/sup><\/strong> whose principal business is to grant loans and advance, acquisition of shares\/stocks\/bonds\/debentures\/securities issued by Government or local authority, leasing, hire-purchase, insurance business, chit business, receive deposits under any scheme or arrangement etc.<\/p>\n\n\n\n<p>Financial activity as a principal business is when a company fulfils the following conditions:<\/p>\n\n\n\n<ul><li>Financial assets constitute more than 50 percent of the total assets.<\/li><li>Income from financial assets constitutes more than 50 percent of the gross income.<\/li><\/ul>\n\n\n\n<p>The RBI has not defined the Principle business under the Act but for the purpose of the financial activity, it has set conditions to be fulfilled before taking License.<\/p>\n\n\n\n<p>Meanwhile, the NBFC and Banks activities are akin but below activities of Banks makes it different from NBFC:<\/p>\n\n\n\n<ul><li>Acceptance of Deposits;<\/li><li>An issue of cheques drawn and being a part of the payment and settlement system;<\/li><li>The deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Registration_of_a_Non-Banking_Financial_Company\"><\/span><strong>Registration of a Non-Banking Financial Company:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Non-banking Financial Company shall commence its business only after taking the certificate of registration from the Bank.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conditions_for_Registration\"><\/span><strong>Conditions for Registration:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The applicant of NBFC shall comply with the following conditions:<\/p>\n\n\n\n<ul><li>The applicant must be registered Company as per the provisions of Companies Act 2016 or earlier Companies Act 1956.<\/li><li>The applicant shall engage in the financial activities mentioned in the Act. If at any time the financial flow of such business increase more than 50% the total capital asset of the Company that such company shall get <strong><a href=\"https:\/\/swaritadvisors.com\/nbfc-registration\/\" class=\"text-primary\">NBFC Registration in India<\/a><\/strong>.<\/li><li>The applicant Company at the time of making an application for NBFC registration shall hold minimum Paid-up the capital fund of INR 2 Crore. Whereas the Foreign Company and foreign investor who wants to set NBFC shall hold paid-up equity capital of INR 5 Crore.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_process_of_Registration\"><\/span><strong>The process of Registration:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul><li>The applicant shall file an application online in RBI\u2019s secured website<\/li><li>After applying online application applicant shall get a print of the application and shall submit the same along with the below mentioned required documents to the Regional Office of the Reserve Bank of India.<\/li><li>The Company shall click on \u201cCLICK\u201d button on the login page to apply for COSMOS.<\/li><li>After clicking one excel sheet display in the window. The applicant shall download the application form.<\/li><li>The company may note to indicate the correct name of the Regional Office in the field \u201cC-8\u201d of the \u201cAnnex-I identification Particulars\u201d in the Excel application form.<\/li><li>After submission, the Company shall get a Company Application Reference Number for the CoR application filed online.<\/li><li>The company has to submit the hard copy of the application form (indicating the online Company Application Reference Number, along with the supporting documents, to the concerned Regional Office.<\/li><li>The status of the application can be checked by the Company from the above mentioned secure address, by inputting in the acknowledgement number.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_Required_along_with_Application\"><\/span><strong>Documents Required along with Application:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul><li>Certified copy of Certificate of Incorporation.<\/li><li>Certified copies of the extract of only the main object clause in the MOA relating to the financial business.<\/li><li>Board resolution stating the following: <ul><li>The company is not carrying on any NBFC activity and will not carry on\/commence the same before getting registration from RBI.<\/li><li>The UIBs in the group where the director holds a substantial interest or otherwise has not accepted any public deposit in the past \/does not hold any public deposit as on the date and will not accept the same in future.<\/li><li>The company has formulated \u201cFair Practices Code\u201d as per RBI Guidelines.<\/li><li>The company has not accepted public funds in the past\/does not hold any public fund as on the date and will not accept the same in the future without the approval of Reserve Bank of India.<\/li><li>The company does not have any customer in line as on date and will not have any customer interface in the future without the approval of Reserve Bank of India. <\/li><\/ul><\/li><li>Copy of Fixed Deposit receiving &amp; bankers certificate of no lien indicating balances in support of NOF.<\/li><li>For companies already in existence, the Audited balance sheet and Profit &amp; Loss account along with directors &amp; auditors report or for the entire period the company for last three years, whichever is less, should be accompanied.<\/li><li>The Bank report of an applicant company, directors of the applicant company having a substantial interest in other companies The Banker\u2019s report should be about the dealings of these entities with these bankers as a depositing entity or a borrowing entity.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exempted_Companies_from_registration\"><\/span><strong>Exempted Companies from registration:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In terms of the powers given to the Bank, to obviate dual regulation, certain categories of NBFCs which are regulated by other regulators are exempted from the requirement of registration with RBI. Which are as follow:<\/p>\n\n\n\n<ul><li>Housing Finance Companies<\/li><li>Merchant Banking Companies<\/li><li>Stock Exchanges<\/li><li>Companies engaged in the business of stock-broking\/sub-broking<\/li><li>Venture Capital Fund Companies<\/li><li><a class=\"text-primary\" href=\"https:\/\/swaritadvisors.com\/nidhi-company-registration\"><strong>Nidhi Companies<\/strong><\/a><\/li><li>Insurance companies<\/li><li>Chit Fund Companies<\/li><\/ul>\n\n\n\n<div class=\"read\"><p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/swaritadvisors.com\/learning\/apply-for-nbfc-license\/\">How to Apply for NBFC License?<\/a><\/mark>.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Non-Banking Financial Companies (NBFCs) are Companies who act alike Banks. NBFC License is a Company duly registered under Act whose principal business is to conduct the financial activity. In India, the number of NBFCs is significantly growing and plays a vital role in the financial sector. In this blog, we will brief about the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2045,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[89],"tags":[623],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/2044"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=2044"}],"version-history":[{"count":13,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/2044\/revisions"}],"predecessor-version":[{"id":19075,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/2044\/revisions\/19075"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/2045"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=2044"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=2044"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=2044"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}